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The current government shutdown, the longest in U.S. history, has had “minimal impact” on the business of Montreal-based construction company WSP, Chief Executive Officer Alexandre L’Heureux said during the contractor’s third quarter earnings call Thursday
But he also noted that it can’t last forever, because the industry as a whole, not just WSP, is feeling the heat.
“If it were to go on for another month or two, I mean, clearly, the whole industry is going to suffer from this,” L’Heureux told investors and analysts on the call.
A myriad of potential consequences have unnerved the industry: Projects that rely entirely on federal dollars, for example, could face job stoppage the government must oversee or approve, experts told Construction Dive in September.
“For now, good,” said L’Heureux. “More color will be offered in the fourth quarter at the end when and if we don’t see any further improvement on that front.”
Despite the stoppage, L’Heureux doubled the company’s bet on the North American construction market, which he echoed his earlier statements during the company’s first quarter results call on May 8.
“Certainly, despite all the noise we hear and the tension between our two countries, Canada and the US, WSP, we believe that one, if not the best place to do work and business in our space is North America,” L’Heureux said. “We continue to focus on North America.”
Time for mergers and acquisitions
Heureux also took care to address possible future M&A moves that WSP might make. In response to an analyst question about whether the M&A outlook is improving, L’Heureux mentioned the company’s desire to leverage its balance sheet.
“As you can imagine, we’re in a very strong position,” L’Heureux said. “I would obviously like to continue to use our balance sheet and use the position of strength that we’re in, given our diversified platform, to be opportunistic and continue to grow.”
M&A activity has increased as contractors i contech companies make deals for strategic gains. WSP is no stranger to practice: During the company’s previous three-year strategic cycle, it made 15 acquisitions and added about 20,000 people to its workforce.
Heureux also took time to address rumors about possible future acquisitions of WSP. On October 24, StreetInsider reported that the company submitted an offer to buy Jacobs, the Dallas-based construction giant.
“I don’t think anyone should be surprised because I’m probably the biggest and most avid proponent of consolidation in our industry,” L’Heureux said. “I’m not surprised that our name is being bandied about with possible rumors. Obviously, I’m not going to comment on those rumors. I was a big supporter of our model 10 years ago and I continue to be.”
The news came after his acquisitions of UK-based engineering firm Ricardo on October 9, next door health and life sciences consultancy Lexica on June 2
the numbers
WSP reported earnings of C$4.53 billion ($3.2 billion) in the third quarter, up 13.8% from C$3.98 billion in the third quarter of 2024. It also saw profits rise to C$284.5 million, up 39.7% from last year’s C$203.6 million.
In addition, the backlog increased to CA$16.4 billion, a 10.6% increase from CA$14.8 billion in 2024.
Heureux praised his company’s performance, along with what he called “continued positive momentum,” and defended the company’s data center work. In the third quarter, WSP secured data center contracts for jobs in the US, Canada, Chile, Sweden, Norway, Thailand, Australia and Singapore.
However, he left investors with a note of caution going forward.
“We are currently evolving in fluid market dynamics, including, among other things, changing climate priorities and evolving geopolitical contexts,” L’Heureux said. “Despite this reality, our key markets are performing well.”
